Chris Lombardi puts defense and security under the spotlight, as he shares his takes on recent NATO and EU cooperation and provides insight into the company’s own long-term strategic partnerships in Europe.

Three trends are currently driving the global electricity sector: decarbonization, decentralization and differentiation. Utilities are making significant contributions to mitigate carbon emissions, while a technology revolution is …

The so-called ‘equivalence test’, part of a new directive, is set to be rubber- stamped by finance ministers next month.

It aims to ensure massive bank-assurance firms are run in a transparent way and that supervision processes are watertight.

The law will insist firms have adequate capital for all parts of their business. Crucially, it will stop them ‘double counting’ capital to use as a buffer against risk in different units.

It would also mean that EU countries in which US giants have offices would be responsible for checking that the American regulators were up to scratch.

The new law will have major implications for US investment banks such as Morgan Stanley, Merrill Lynch and Goldman Sachs, which have offices worldwide. Wall Street analysts are concerned that, if US regulation is found wanting, the EU could impose tough remedies.

These could include:

Forcing the US firm to set up a separate EU-based holding company subject to the full rigours of the European system;

Giving EU regulators the right to supervise a firm’s entire global operations, and;

In the worst-case scenario, ordering the US firm to close its EU offices.

US bankers say the EU is being too heavy-handed. “Maybe with Nigeria or Timbuktu they [the EU] have to take a different approach but, broadly speaking, we are well supervised,” said one London-based investment banker. US Treasury Department officials have already voiced their concerns over the issue during a meeting in Brussels in March.

“We are clearly watching this one right now more closely than others – and we want to make sure that any issues that arise from it are handled properly,” said a Washington official.

Nick Collier, chairman of the EU committee of the American Chamber of Commerce’s financial services group, described the equivalence test as “crude”, adding that the EU and US authorities needed to boost coordination to avoid yet another trade row.

The Council of Ministers agreed the outline directive in principle and Collier said the decision “makes proper dialogue and avoiding inflexible ‘box-ticking’ all the more important”.

Collier, a director of European government and regulatory affairs for Instinet, an online securities broker owned by Reuters, said both sides had pledged to engage in more serious dialogue at their US-EU summit earlier this month in Washington.